Economic Storm Batters Ohio Town

When President Obama spoke of "the winter of our hardship" in his inaugural address, no one in America understood that better than the folks 60 Minutes met in Wilmington, Ohio. They're people in the grip of a brutal series of layoffs at DHL, the shipping company. Their experience was part of the news this past week that new claims for unemployment benefits are the highest in 26 years.

Since the economic crash of 2008, taxpayers have committed to more than $1 trillion in various bailouts of Wall Street. But not much of that is reaching families in crisis. On kitchen tables, headlines from Washington and New York lie beside unpaid tuition bills and foreclosure notices. After all the speeches and parties of Inauguration Day, what were the families in Wilmington asking?

"Are we going to lose our home? Are we going to be able to pay our property taxes? What are we gonna do for insurance? What are we gonna do for food? You know, and these are questions that you'd never think that we'd ask yourself. And now they're discussions in the home," says Mike O'Machearley, who is losing the job that helped support four children and a grandson.

"They always say that God closes a door, he opens another one. And we have faith that he will," he adds.

Faith is what sustains Wilmington now. Settled by Quakers 200 years ago, it's a community with such an all-American look that it seems like a movie set. About 12,000 people live there. And many, like O'Machearley, work in the last industry you'd expect in a laid back town.

In 1980, Airborne Express turned Wilmington's abandoned Air Force base into a hub for overnight shipping. Eight thousand people found work at what they call "the air park." Then, in 2003 a German company, DHL, bought Airborne in an effort to win a big piece of the U.S. market. It didn't work. The merger was rocky, there were service disruptions, and customers left in droves. With last fall's economic crash, DHL was losing $6 million a day in the U.S.; layoffs started coming by the hundreds.

People who worked there for decades found themselves in DHL-sponsored meetings learning about unemployment.

"We could tell you what we did on a daily basis, but you wouldn't believe it. You know, boxes in a big container, and it'll weigh 800 pounds, you push it out the door through eight inches of snow, and push it up on a barge, and we were idiots enough that we did it by ourselves. We worked as a team, and we had a good friend right along side of us," Keith Rider tells correspondent Scott Pelley.

"Our friends. It's crazy. You'll never understand it. But we loved it," Rider says.

"I remember people with scarves breathin' through ice in just unreal…eyelashes frozen and I started in '81. And when you worked, you worked. Why weren't we bailed out?" Morris Deufemia asks.

DHL is spending $260 million on severance pay and health insurance that will keep many workers going for several months. But there is a feeling in town that the German company wrecked a successful American business and wiped out thousands of jobs.

"I was educated here, Wilmington city schools and then at Wilmington College," says Mayor David Raizk, who has been getting layoff notices for months.

By federal law, companies have to notify local government when layoffs are coming. Raizk is getting a new letter from DHL every week or so, adding a few hundred at a time to the growing list of lost jobs.

"It's got classifications and numbers on it, but there's not names, addresses and who their wife and their family and children are. So you look at these and at the end of the day, you think that's 800 and some people, folks, live here, work here, you know," Raizk says.

The mayor told 60 Minutes one out of three households has a family member working at the air park.

Angela and John Pica are raising four children on two air park salaries. Angela started at Airborne Express when she was 19. Now, as a supervisor, she walks laid off workers to the company gate and takes their ID badges away.

"Today, I escorted five individuals out today. Last week, I think I escorted three," she tells Pelley.

Asked what the last thing is she says to them, Pica says, "I tell them that I wish them the best. And it has been a pleasure, working with every one of them, because they're a great bunch of people. And they deserve so much better than this."

For a town this small it's like the trauma of Katrina without the physical damage. People like to say their jobs drive them crazy but for many, work keeps them sane.

"On November 2 of 2003, my son was killed over the skies of Fallujah [Iraq] in a Chinook helicopter that was shot down. And he died with 16 other soldiers," Mike O'Machearley tells Pelley.

At that time, O'Machearley worked at a plant making car parts. "And the outgoing vice president from Airborne Express knew I was having some problems and he said, 'Yeah, we need bus drivers. Come on back out,'" he remembers.

"The job at DHL after his death meant a lot to you," Pelley remarks.

"I was working at a machinery line at a factory. And all I could see was his face, all day long. And it was killing me inside. And this job meant that I could see different people and talk to people and kind of become human," O'Machearley says.

By Christmas, the mayor had received 14 layoff letters. Now, 3,000 people were out of work. Five thousand were still on the job, but things were getting bleak for them too.

About this time, a lot of people in the air park began to see their schedules cut. Instead of working eight hours a day, they were working four. And of course, that cut their income by half. They weren't unemployed, they were underemployed. And it turns out in this country that the number of people who are underemployed is roughly the same as those who have no job at all.

Combine the numbers - call it the "suffering index" - and it comes to about 13 percent nationwide. It's certain to get worse. Geri Lynn Thomas and Bruce McKee saw their hours cut in half.

"I just can't afford my house. I can't afford the payment. And I had to look at, you know, trying to just feed my family, my kids. That's my priority," McKee says.

He says he made his last house payment three months ago.

"You start stocking up on groceries. You buy an extra can of soup or something, or toilet paper, package of toilet paper, peanut butter and stuff that you can stock in your cabinets to stuff in your freezer," Thomas says.

She's been building a stockpile of food. "So you just have to start doing and you do without things. And your son drops out of college early. You just do what you have to do."

"He dropped out of college?" Pelley asks.

"Yeah, we had to. We had to pull him. He didn't go the following winter sessions this year. We don't have the money," Thomas explains.

Neither she nor her husband went to college, and sending their kids to college was their dream. "It was my dream for my kids to have better than I had. But now they're not going to," she says.

Dreams are closing on South Street as one layoff creates another. "I think one in five small businesses would, will fail or could fail," Mayor Raizk predicts.

He worries about what happens when thousands of people lose their health insurance. "Approximately $8 million worth of revenue for our local hospital was derived from the insurance. Now, if you take away that $8 million plus how much charity care is gonna increase because people don't have insurance, you could put the hospital outta business. You think about that," he says.

In town meetings, businesses are begging for help. U.S. Senator Sherrod Brown (D-Ohio) is asking for $100 million in federal aid for distressed communities all around the country. And he's trying to get DHL to at least donate the air park to the city.

"There's hurt. There's a sense of betrayal," Sen. Brown tells Pelley.

"Betrayal is a strong word," Pelley remarks.

"DHL came in and made promise and I don't think they lived up to their side of the bargain," Brown argues. "That's the past, we can't dwell on that. We need to move forward. DHL we hope is going to help us with the air park."

In the meantime, the Sugar Tree Ministry's soup kitchen is being expanded by Allen Willoughby. They are remodeling the space, adding 200 more seats - roughly double the capacity they currently have. "We should be able to feed about 350 people a day," he says.

DHL workers in their meetings just heard the state unemployment benefit fund went broke last week. The federal government rushed in with an emergency loan of $500 million just to keep the checks coming. The feds are also spending $4 million to train workers in computer skills, but that doesn't mean there'll be jobs.

Laid off workers are guaranteed access to health insurance for a year and a half under a federal law called "COBRA," but there's a catch.

"We got the COBRA and it was gonna be, like, a little over $1,500 a month for my health care. Well, you know, my unemployment's gonna be $200 a week. That's not even gonna make a dent," Diana Smith tells Pelley.

"When you're looking forward now, what questions are on your mind?" Pelley asks Dorothy Faulconer.

"Where you gonna go to next?" she says. "We got two families livin' in my house right now. My husband, and my youngest daughter and her husband and little baby and another one on the way. They can't make it on their own, and we can't make it."

John Pica may have a DHL job in another city, but they can't sell the house in this market. Angela, the DHL supervisor is so worried that she's been looking for work too.

She says she's applied to 35 to 40 different positions, but hasn't gotten any calls back.

"I've been applying for everything. In retail, and supervisor positions. Warehousing positions. I don't think anything's beneath me to do. So, but I still haven't received any call-backs," she says.

Three weeks later, Angela, who spent months walking laid off workers to the gate, found herself among them.

"Today is my last day. I'll be surrendering my badge to my manager today. After 18 years. I'm 37, so that's almost half of my life I've been there," she told Pelley.

With her badge taken, it was real now. Asked what she was thinking, Pica says, "I just can't believe it's over. I'm not gonna see a lot of these people again."

With his job as a DHL bus driver ending, Mike O'Machearley is relying on himself. He's turning a hobby into a business, making engraved hunting knives for collectors. "I'm an old-school kind of guy. And I'm looking at, maybe like on Tuesday nights we're gonna have no electricity Tuesday nights. We're gonna light the oil lamps and play checkers and read books by the candlelight. And just talk to each other. And maybe we'll become a tighter family through it."

This week DHL Express will stop all domestic shipping, except international service. Altogether, about 10,000 people are losing their jobs.

Produced by Solly Granatstein and Nicole Young